Last week, the CFPB published a blog post, stating that it “strongly encourages” mortgage servicers to participate in Homeowner Assistance Fund (HAF) programs. The Bureau asserts that it “remains focused on preventing avoidable foreclosures to the maximum extent possible and expects mortgage servicers to do the same.”
By way of background, HAF is a federal program that provides money to states, tribes, and territories to assist homeowners with housing costs. These funds can be used to pay down delinquent amounts, so that borrowers can avoid foreclosure or be better positioned for loss mitigation assistance. Implementation of HAF programs can be complicated by varying procedures among the states.
The CFPB states that while servicer participation in HAF programs is voluntary, accepting HAF funds can be pivotal in resolving delinquencies and avoiding foreclosures in some instances. The Bureau encourages servicers to train customer service personnel regarding the availability of HAF programs, and reminds the industry of the requirement to provide accurate information to borrowers regarding loss mitigation. For servicers participating in HAF programs, the blog post notes the requirement to maintain policies and procedures reasonably designed to ensure proper loss mitigation evaluation, incorporating HAF procedures as applicable. The CFPB states, in particular, that servicers must ensure that borrowers are not improperly referred to foreclosure, while the servicer is working with a borrower during the HAF application process or waiting for payment of HAF funds.